A key valuation indicator for Bitcoin (BTC) has fallen to levels that historically signal major buying opportunities. The Bitcoin MVRV ratio has dropped below its 365-day moving average. This movement suggests the digital asset is entering an “undervaluation phase.” Analyst ShayanMarkets from the on-chain analytics platform CryptoQuant noted this in a recent publication.
The analysis details that the MVRV currently stands near 1.9, slightly below its one-year average. Historically, this dip has marked a local bottom before significant rallies. Data shows similar patterns preceded impressive climbs. These events occurred in mid-2021 (135% rally), June 2022 (100% rally), and early 2024 (196% rally). ShayanMarkets suggests this consistent pattern indicates that long-term holders are beginning to accumulate at these levels.
This drop in the Bitcoin MVRV ratio is not happening in a vacuum. It follows an approximately 18% price correction. The asset retreated from its all-time high of $126,000 down to $103,530. According to the analyst, this decline helped reduce “speculative excess” in the market. Furthermore, it reflects growing long-term confidence. If the metric begins to turn upward from current levels, it would confirm a cyclical bottom formation. This could support a renewed bullish phase heading into the fourth quarter of the year.
The macroeconomic context also appears to be aligning. Michaël van de Poppe, founder of MN Trading Capital, pointed out gold’s sharp decline. The precious metal is down 8.5% from its all-time high. Van de Poppe suggests that gold may have peaked momentarily. This could signal the start of a capital “rotation” into Bitcoin and altcoins. This thesis strengthens the digital economy against traditional assets.
Could gold’s decline propel Bitcoin toward $240,000?
The potential capital rotation from gold adds a considerable bullish perspective. Analysts at Bitwise have modeled this scenario. They suggest that a modest 5% capital shift from gold into Bitcoin could drive BTC’s price to $240,000. This outlook joins other technical targets. Some analysts project short-term goals of $115,000. Others see potential as high as $190,000 if the final leg of the current bull cycle unfolds.
Traders are also watching the upcoming U.S. Consumer Price Index (CPI) report. A soft inflation reading could boost risk appetite. This would benefit assets like Bitcoin, especially if it encourages interest rate cuts. The confluence of a technical bottom signaled by the MVRV and a potential capital rotation sets the stage for a sustained recovery in the coming weeks.
